JOINT STOCK COMPANY GROBINA ANNUAL REPORT 2016 (REGISTRATION NUMBER )

Transcription

1 JOINT STOCK COMPANY GROBINA (REGISTRATION NUMBER ) ANNUAL REPORT 2016 (26 TH financial year) PREPARED IN ACCORDANCE WITH THE LAW OF THE REPUBLIC OF LATVIA ON THE ANNUAL REPORT AND CONSOLIDATED ANNUAL REPORT AND INDEPENDENT AUDITOR S REPORT Liepaja, 2017

2 Independent auditor's report 2

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5 CONTENTS Information on the Company 6 Management report 7 Statement of Management Responsibility 8 Profit or losses statement 9 Balance sheet 10 Cash flow statement 12 Statement of changes in equity 13 Notes to the Financial statements 14 5

6 Information on the Company Name of the company Legal status of the company Joint stock company Grobina Publick joint stock company Number, place and date ot registration Liepaja, 23d of August 1991 Legal address Lapsu street 3, Dubeni, Grobina district, Latvia, LV-3438 Shareholders Aksana Jansone, 41.27% Argita Jaunsleine, 23.98% Gundars Jaunsleinis, 25.75% Others, 9% Board of the Company Gundars Jaunsleinis chairman of the board, since Gunta Isajeva member of the board, since Ireneusz Sajewicz member of the board, simce Andris Vitolins member of the board, since to Council of the Company Ojars Osis chairman of the council, since Argita Jaunsleine vice president of the council, since Janis Liepins member of the council, since Girts Milgravis member of the council, since Evija Sivare member of the council, since Silvija Neimane member of the council, since to Financial year 1 st of January 2016 to 31 st of December 2016 Previous financial year 1 st of January 2015 to 31 st of December 2015 Auditors Ieva Liepina certified Auditor Certificate No. 161 Ltd Ievas Liepinas birojs Reg.No Brivibas street 39, Riga, LV-1010 License No.139 6

7 Management report The mane business activity of JSC "GROBIŅA" is fur-farming of minks for fur production and farm animals feed production. In 2016 company has worked with neto turnover of , representing decrease of 43%. In months has realized mink skins and the average price of the skin is 22.3 / pcs, while - 12 months of 2015 were sold mink skins at an average sales price of / pcs losses of the company is , net net loss per share is 6.49, but in 2015 was a net profit per share Average number of employees in 2016 was 118 employees, in employees. In he global markets in 2016 there was a dramatic fur sales prices fall, as compared to March 2015 the average auction price of March 2016 auction, the average price fell by 54% and amounted to only Consequently, it is given that March 2016 was sold at auction essential JSC "Grobina" produced skin amount ~ skins - JSC "Grobina" cash flow March planned auction revenues lagged behind by about 2 million.. Result of these developments the company was unable to meet in full its obligations towards its creditors. Thus, the rapid response to the situation in the Court there was submitted an application for the JSC "Grobiņa" process of legal protection proceedings. Consequently, the Court of Liepaja on April 6, 2016 a decision was instituted Nr.C JSC "Grobina" legal protection proceedings. As the majority of the creditors, according to the Insolvency Law Article 42, third paragraph, agreed JSC "Grobina" management developed by the process of legal protection plan with respect to the accumulation of unsecured creditors (suppliers) debts essentially provides only the debt principal repayments deferred until June 2018, based on the Liepaja Court judgment of 29 June 2016 the JSC "Grobina" May 17, 2016 the legal defence plan was approved. By 3d of March 2017, Liepaja court decision is confirmed JSC "Grobina" redress process plan amendments. Since JSC "Grobina" legal protection proceedings prosecutioncompany continues economic activities in accordance with an approved JSC "Grobina" legal protection process action plan and its amendments. JSC "Grobina" legal protection proceeedings action plan was based on a forecast that the 2017 the average auction price will be 30 per skin, according to the March 2017 auction results have materialized as a result of the JSC "Grobiņa" management reasonably believes that company will be able to comply with the court approved legal protection process action plan and to restore its ability to cover its financial obligations. In addition, based to the performance of the project as an independent fur animal feed production factory establishment, JSC "Grobina" can make realistaion of produced fur animal feed to other sompanies in industry in Latvia, as well in abroad, thus gaining more revenue in addition to the production of fur. Liepaja, 28 th of April 2017 Gundars Jaunsleinis Gunta Isajeva Ireneusz Sajewicz Chairman of the board Member of the board Member of the board 7

8 Statement of Management Responsibility Management is responsible for the Company's Financial Statements in accordance with the Annual Accounts Act. Financial accounts present fairly the financial position at the end of the year, results of operations and cash flows for the year. The Board confirms that the financial statements, which you can find in pages 8. to 22.preparing and decisions and observations have been prudent and reasonable. The Management Board confirms that the financial statements prepared in accordance with the action there [rance proncipu. Management is responsible for keeping proper accounting records, assets of the Company, as well as fraud and other irregularities detection and prevention. Management is responsible for Latvian statutory requirements. Liepaja, 28 th of April 2017 Gundars Jaunsleinis Gunta Isajeva Ireneusz Sajewicz Chairman of the board Member of the board Member of the board 8

9 Profit or losses statement Notes Net turnover: of the agricultural activity Costs of goods sold or services provided 2 ( ) ( ) Gross profit or lossess ( ) ( ) Distribution expenses 3 (13 480) ( ) Administratice expenses 4 ( ) ( ) Other operating income Other operating expenses 6 (6 045) (54 258) Interest and similar expenses, incl.: for other parties 7 ( ) ( ) Profit or lossess before corporate income tax ( ) Changes in deferred tax assets or liabilities Profit or lossess for the financial year ( ) Notes are an integral part of these financial statements. Liepaja, 28th of April 2017 Gundars Jaunsleinis Gunta Isajeva Ireneusz Sajewicz Chairman of the board Member of the board Member of the board Liene Vike Accountant 9

10 ASSETS Balance sheet Notes NON-CURRENT ASSETS Fixed assets Immovable properties: land plots, buildings and engineering structures Fauna and flora: draft animals or productive animals and perennial plantings Technological equipment and machinery Other fixed assets Advances for fixed assets TOTAL Non-current financial investments Deferred tax assets TOTAL TOTAL NON-CURRENT ASSETS CURRENT ASSETS Inventories Raw materials and consumables Work in progress Finished goods and goods for sale Advances for inventories Fauna and flora animals and annual plantings TOTAL Account receivable Trade receivables Other receivables Deferred expenses Accrued income TOTAL Cash and bank TOTAL CURRENT ASSETS TOTAL ASSETS Notes are an integral part of these financial statements. 10

11 EQUITY, PROVISIONS AND LIABILITIES Balance sheet Notes EQUITY Share capital Reserves: other reserves Retained earnings or uncovered losses brought forward from previous years Current year profit or losses ( ) TOTAL EQUITY ( ) LIABILITIES Non-current liabilities Loans from banks Other borrowings Trade payables Taxes and state social insurance payments Deferred income TOTAL Current liabilities Loans from banks Other borrowings Advances from customers Trade payables Taxes and state social insurance payments Other creditors Deferred income Accrued liabilities TOTAL TOTAL LIABILITIES TOTAL EQUITY, PROVISIONS AND LIABILITIES Notes are an integral part of these financial statements. Liepaja, 28th of April 2017 Gundars Jaunsleinis Gunta Isajeva Ireneusz Sajewicz Chairman of the board Member of the board Member of the board Liene Vike Accountant 11

12 Cash flow statement Cash flow from operating activities Profit or losses before corporate income tax ( ) Adjustments for: depreciation and impairment of fixed assets provisions (except provisions for doubtful debts) - (12 589) interest and similar revenue Profit or loss prior to changes in current assets and current liabilities ( ) Increase or decrease of account receivable ( ) Increase or decrease of inventory Increase or decrease of account payables and other liabilities ( ) Gross cash flow generated from operating activities Interest payments ( ) ( ) Net cash flow generated from operating activities Cash flow from investing activities Acquisition of fixed and intangible assets (30 822) ( ) Net cash flow generated from investing activities (30 822) ( ) Cash flow from financing activities Loans received Subsidies, grants, gifts or donations received Repayment of loans ( ) ( ) Net cash flow generated from financing activities ( ) Net cash flow in the financial year (41 975) Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year Notes are an integral part of these financial statements. Liepaja, 28th of April 2017 Gundars Jaunsleinis Gunta Isajeva Ireneusz Sajewicz Chairman of the board Member of the board Member of the board Liene Vike Accountant 12

13 Statement of changes in equity Share capital Reserves Retained earnings or uncovered losses brought forward from previous years Current year profit or losses Opening balance ( ) Increase/decrease in retained earnings Changes in accounting policies Prior year adjustments - - ( ) Opening balance Increase/decrease in retained earnings ( ) ( ) Prior year adjustments ( ) - Closing balance ( ) ( ) Notes are an integral part of these financial statements. Liepaja, 28th of April 2017 Total Gundars Jaunsleinis Gunta Isajeva Ireneusz Sajewicz Chairman of the board Member of the board Member of the board Liene Vike Accountant 13

14 Notes to the Financial statements 1. Summary of accounting policies General principles A The mane business activity of JSC "GROBINA" is fur-farming of minks for fur production and farm animals feed production. Financial statements are prepared in accordance with the Laws of the Republic of Latvia "On Accounting" and "On the Annual Report and Consolidated Annual Report" (the Law). The financial statements have been prepared according to the historical cost accounting principle. The income statement is prepared in accordance with the function of expense method. Changes in accounting policies Due to adoption of the Law on the Annual Report and Consolidated Annual Report (the Law) in 2016, the Company has changed the accounting standards as mentioned below. Due to enactment of the Law, the structural form of the balance sheet, income statement. Moreover, to improve a clear and fair presentation, the Company performed reclassification of certain types of revenue and costs. Prior year comparatives were classified in the financial statements according to the principles of the financial year and are comparable. Reclassification does not affect the financial results. Name of items reclassified Adjusted Adjustments Prior adjustments Profit or losses statement Costs of goods sold or services provided Other taxes - (9 341) Balance sheet Other provisions - (58 517) Accrued liabilities Foreign currency conversion in euro This financial statement is prepared in euro (), which is the functional currency of the Company and the official currency of the Republic of Latvia. All transactions denominated in foreign currencies are converted into euro at the exchange rate set by the European Central Bank on the day of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into euro in accordance with the official exchange rate set by European Central Bank for the last day of the financial year. The profit or loss resulting from the exchange rate fluctuations of the foreign currency are recognized in the income statements in the respective period on net amount.. 14

15 1. Summary of accounting policies (continuation) Intangible investments and fixed assets Intangible investments and fixed assets are initially recognized at the purchase cost. Purchase cost includes costs, directly related to the acquisition of intangible and fixed assets. In financial statements the intangible and fixed assets are recognized at purchase cost less depreciation. Depreciation is calculated on a straight-line basis applying the following rates of depreciation set by the management, based on the estimated useful life of the fixed assets: Buildings - 20 years; Technological equipment and machinery Other machinery and equipment years; - 5 years. The Company capitalizes its fixed assets valued over 100 with useful life exceeding 1 year. Depreciation for improvements and other low costs items with the value less than 100 is recognized by 100 % after commissioning. If sufficient evidence is acquired that the future economic benefit associated with subsequent repair or reconstruction costs will flow to the Company, which exceeds the return set previously, costs are capitalized as additional costs to the fixed asset. Capitalizing the cost of replaced parts, the carrying amount of the part replaced is derecognized and charged to the income statement. All other repair and maintenance costs are charged to the income statement during the financial period in which they are incurred. Net gains or losses from disposal of fixed assets is calculated as the difference between the carrying amount of the fixed asset, write-off of related assets revaluation reserve (if any) and proceeds from sale, and recognized in the income statements during the period when disposal are incurred. If it is possible to conclude due to any kind of occurrence or circumstances that residual value of fixed or intangible assets could exceed its recoverable value, appropriate value of fixed or intangible asset is to be decreased until recoverable value. Recoverable value is calculated as the highest of fair value less costs to sell or value in use. Inventories Inventories are recognized at the lower of purchase or production cost and net realizable value. Purchase costs consists of purchase value and overheads, which have been acquired, by delivering inventories at their current position and value. The c The balance value of the inventories is calculated by using the weighted average method. When the net realizable value of inventories is lower than its costs, the difference is recognized as provisions for the decrease of value. Account receivable Trade receivables are recognized at invoiced amounts. After the initial recognition account receivables are measured at net amount less provisions for doubtful debts. Provisions for doubtful receivables are recognized when the management of the Company considers that it is probable that the total amount of receivables will not be collected in full. Cash and cash equivalents For the purposes of the cash flow statement, cash and cash equivalents comprise cash, the balances of the current bank account and other current liquid financial assets with maturities up to 90 days.. 15

16 1. Summary of accounting policies (continuation) Borrowings Borrowings are recognized at the proceeds, net of transaction costs incurred. Subsequently, borrowings are stated at amortized costs using the actual interest method. Any difference between the original amount borrowed net of transaction costs and the redemption value is recognized in the income statement gradually during the loan use period or in accordance with accounting policy capitalized at the value of construction in progress. Capitalization of borrowing and other costs The cost of asset under development is increased by borrowing costs and other direct costs during the period of time that is required to complete and prepare the asset for its intended use. The cost of asset is not increased by borrowing costs during the period with no active development of asset. Accrued liabilities for unused annual leave Amount of accumulated unused annual leave is determined by multiplying the average day rate of employees for the last six months of the financial year by the amount of accrued but unused annual leave at the end of the reporting year. Provisions, contingent liabilities and assets Provisions are liabilities related to current or previous years events and at the preparation of financial statements it is probable that an outflow of resources will be required to settle the obligation and its amount can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation. Income recognition and revenue Revenue contains the total value of goods and services sold during the year excluding discounts and value added tax. Income is recognized according to the following principles: Sales of goods - after significant ownership risk and rewards have been passed to the buyer; Rendering of services - under the percentage of completion method; Income from fines and penalties - at the moment of receiving the payments; Interest income - on an accrual basis; Dividends - at the moment of acquiring legal rights to receive them.. Corporate income tax Corporate income tax for the financial year is included in the financial statements based on the management s calculations prepared in accordance with the tax legislation of the Republic of Latvia. Deferred tax is calculated according to the liability method with respect to all temporary differences between the values of assets and liabilities in the financial statements and their values for tax calculation purpose (tax basis). However, where the deferred income tax arise from first recognition of the assets and obligations resulted from transactions, which are not the business combination, and at the moment of transaction do not affect profit or loss neither in the financial statements nor for the taxation purposes, the deferred income tax is not recognized. The deferred tax liability is calculated based on the tax rates that are expected to be applied when the temporary differences reverse. The temporary differences mainly arise from different fixed asset depreciation rates. In cases, when the total result of the deferred tax calculation is an asset, it is recognized in the financial statements only if a future taxable profit will be available against which the temporary differences can be utilized. 16

17 2. Costs of goods sold or services provided Sold mink skins production prime cost Comunal service costs Other services and transport costs Fixed asset repair and maintenance costs Employees salary State social insurance payments and other social guarantees for employees Fixed addets depreciation Insurance costs Adjustments Taxes Vacation provisions (17 288) (14 357) TOTAL: Distribution expenses Commission expenses Advertising and representation costs TOTAL: Administrative expenses Office maintenance and communication services costs Book keepind and other professional service expenses B ank service costs Transport and business trip costs Other administration and management expenses Membership fees Administration salary State social insurance contributions for administration Fixed assets depreciation Vacation provisions TOTAL:

18 5. Other operating income Public subsidies for breeding animals for breeding EU co-financing and support payments Proceeds from the write-off Guarantee Proceeds from unsolicited accounts payable Profit from sale of fixed assets, net Other revenue TOTAL: Other operating expenses Loses from disposal of intangible and fixed assets Income (48 621) - Expenses With economic activities not directly related to representation expenses Bed debts TOTAL: Interest and similar expenses Penalties paid Interest paid on advances Interest payments on leases and loans TOTAL:

19 8. Fixed assets Fixed assets under Land plots, buildings and Technological equipment Advances for fixed Other fixed assets development and engineering structures and machinery assets construction in progress TOTAL Initial value Accumulated depreciation and improvements ( ) ( ) ( ) - - ( ) Balance shee Bilances vērtība 1. janvārī Purchase and improvements cut off - - (14 081) - - (14 081) cut off Movements ( ) ( ) ( ) Depreciation calcolated ( ) (43 431) ( ) - - ( ) Balance shee Initial value Accumulated depreciation and improvements ( ) ( ) ( ) - - ( ) Balance shee Bilances vērtība 1. janvārī Purchase and improvements cut off - - (72 965) - - (72 965) cut off Movements ( ) ( ) Depreciation calcolated ( ) ( ) ( ) - - ( ) Balance shee Initial value Accumulated depreciation and improvements ( ) ( ) ( ) - - ( ) Balance shee

20 9. Inventories Raw materials and consumables, including fodder fuel for heeting repair materials fuel, gas Shavings for skin processing Work in progress, including Raw mink skins Finished goods and goods for sale, including Mink skins Other Animals and annual plantings Provisions ( - ) ( - ) TOTAL: Trade receivables Trade receivables Provision for doubtful debts ( - ) ( - ) TOTAL: Other receivables Tax receivables and tax prepayments Advance payments for services The security lodged Loans for bord and council members Provisions for doubtful advance payments ( - ) ( - ) TOTAL: Cash and bank currency currency Funds, TOTAL (): Nauda Cash Bank TOTAL ():

21 13. Share capital Shareholders Position in company % Position in company % Aksana Jansone No No Gundars Jaunsleinis Argita Jaunsleine Chairman of the board Member of the council Chairman of the board Member of the council Other shareholders X 9.00 X 9.00 TOTAL: x x The company's share capital on amounts to ( ), it consists of shares with a nominal value of 1 lats or 1,423 euros. December 31, 2015 public circulation is bearer shares. All share capital has been paid up. Restrictions on alienation of shares or specific consent of the receiving disposal of shares have been determined. The statutes are not subject to special restrictions or provisions relating to the right to vote and the public is not aware of any shareholders agreement of this kind. Each member shall have the right to represent the company individually. Between the company and members of the board there is no agreement on the compensation, resigns. The statutes are not subject to special restrictions or provisions relating to the election of board members, changes in the composition of the Board and amendment of the statutes. 14. Loans from banks Long term The term of payment Loan, * May TOTAL: Short term The term of payment Loan, * May TOTAL: * Suitable loan annual interest rate consists of the bank set the margin rate and a variable base rate - Euribor. For more than 5 years, repayable tranche is

22 15. Other borrowings Long term Other loans from residents, individuals, * Other loans from residents, legal entities, The term of payment * Financial lease commitments, ** 2 5 years Short term TOTAL: The term of payment Financial lease commitments, 2 5 years TOTAL: * Credit lending rate is 0% and the repayment date by agreement is May 27, 2022 ** Finance lease (leasing) contracts, which falls due later than one year but not more than five years after the year end. 16. Deferred tax Deferred tax is calculated from the following temporary differences between assets and liabilities and their values for corporate income tax purposes: Deferred tax liabilities at the beginning of reporting year ( ) Deferred tax expense / (income) statement of profit and loss ( ) ( ) Deferred tax liabilities / (assets) at the end of reporting year ( ) ( ) Temporary difference on depreciation of fixed and intangible assets Tax losses carried forward ( ) Net temporary difference , deferred tax assets Other creditors Salaries for December Deductions from salaries Deposited salary, injury compensation (416) 536 Advanced payment receiving person debts Other creditors Deferred income TOTAL: EU structural funds, long-term part EU structural funds, short-term part TOTAL:

23 19. Management salaries and number of employees Management contributions Salary Compulsory social insurance contributions Salary of the company s board, total: The Company's Council members do not receive remuneration. The average number of employees during the reporting year Collateral and securities All the company's assets as a set of case and its future components, including the mark "A / S GROBIŅA" herd u.t.t. stocks are pledged as security for credit and the Finnish auction house Saga Furs of advances paid for the security. Secured claims the maximum amount of the balance sheet date amounts to Subsequent events By 3d of March 2017, Liepaja court decision is confirmed JSC "Grobina" redress process plan amendments. There are no others subsequent events since the last date of the financial year until the date of signing of financial statements, which would have a significant effect on the financial position of the Company as at 31 December Liepaja, 28th of April 2017 Gundars Jaunsleinis Gunta Isajeva Ireneusz Sajewicz Chairman of the board Member of the board Member of the board Liene Vike Accountant 23